Hostile Takeover: Paramount Sues To Block Netflix Deal
Synopsis
Paramount Skydance has ramped up its hostile bid to take over Warner Bros. Discovery by commencing a full-scale proxy fight and filing suit. CEO David Ellison intends to put forth a new slate of directors for the Warner Bros. board to get in the way of a competing $83 billion deal with Netflix. Despite eight rebuffs, Paramount is employing its $108.4 billion proposal, supported by the billionaire Larry Ellison, to persuade investors that it’s safer to keep the whole company intact than spin off cable networks like CNN.
Paramount has initiated an aggressive “proxy fight” to acquire Warner Bros. Discovery (WBD). On Monday, January 12, 2026, it was confirmed that Paramount Pictures would try to temporarily replace several members of the Warner Bros.-handpicked board of directors.
This is a brazen move to derail a competing deal in which Netflix would purchase the most valuable parts of Warner Bros.: its entire movie studio and HBO network, for roughly $83 billion. Paramount claims it’s simply trying to buy the whole company for $108 billion in a deal that is much better for the poor souls who own stock in the company.
What is a Proxy Fight?
A proxy fight occurs when one company seeks to persuade the shareholders (the owners) of another company to vote against the current bosses. Rather than quietly buying the company outright, Paramount is asking for permission from Warner Bros. shareholders to elect new directors who will say “yes” to Paramount’s bid and “no” to Netflix.
It’s also taking Warner Bros. to court in Delaware. They are suing to pressure the company into disclosing more about the financial terms of the Netflix deal. “Shareholders are in the dark and cannot make an informed decision without a true understanding of what each piece of the company is worth,” Paramount said.
The Two Rival Offers
The fight has divided Hollywood between two camps. On one side, there is a plan to tear the company apart, and on the other, a counterproposal to keep it together:
• The Netflix Deal ($83 Billion): Netflix covets only the “crown jewels” — movie studios and streaming services like Max. The cable TV channels (including CNN, TBS, and the Cartoon Network) would be spun into a smaller, separate company.
• The Paramount Offer ($108 Billion): Paramount is going for everything. Supported by $40 billion in personal cash from the Oracle cofounder Larry Ellison, Paramount vows to hold on to all parts of Warner Bros. together.
Its owner, ViacomCBS, recently announced that it’s slashing 2,000 of its own jobs to save costs but says it can still win this monster takeover battle.
Why the Board is Saying No
The current board at Warner Bros. thus far has urged shareholders to reject Paramount’s offer. They say that Paramount’s plan is too risky because it would require amassing an immense amount of debt — more than $50 billion. They also fear that the deal could fall apart if economic circumstances shift, and that shareholders would get nothing.
But Paramount counters that the board is just making excuses. They contend that the cable TV channels not included in the Netflix deal are “essentially valueless” standing alone. With this proxy fight, Paramount is taking it out of the bosses’ hands and giving it to the investors. The big showdown will come in three weeks when the window for nominating new directors formally opens.
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At Inspirepreneurs Magazine, covering entrepreneurship, business failures, and the human stories behind the world's most ambitious founders. She writes at the intersection of strategy and storytelling.
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